Tuesday, 27 September 2016

The Future of Netflix

The Big boss over at Netflix recently revealed that in the next two years they want to increase the amount of Netflix Original content on the service so that it constitutes fifty per cent of what they offer. He claimed they were willing to pump up to one billion dollars into this effort.
I’m not sure they are thinking too clearly.
The price of Netflix recently went from £5.99 to £7.50 (two screens, HD) to facilitate their increased focus on original content. This was fine, the Marvel Series, Orange is the New Black and Unbreakable Kimmy Schmidt are some of my favourites on the service, and more of that type of quality content is certainly ok by me for an extra £1.51 per month. Using this figure it’s reasonable to assume that Netflix will become a £10 per month service in order to create all of this new content – the same big boss who announced the fifty per cent mark also said that they would not rely on advertising or sports to fund this. This is almost double what Amazon charge.
The other thing to consider is that the more high quality content Netflix produces, the less other companies will show their shows and films on the service. This means Netflix has to create shows that can rival The Office, The Walking Dead etc. I believe that they can do this, the Netflix shows I watch are of an incredibly high quality, the issue will lie with the films.
Currently I want to watch Tallulah and Beasts of No Nation, both marketed as Netflix Original movies and both highly rated. The rest of their movies? Meh. They have terrible Adam Sandler films and terrible Ricky Gervais films. Has-beens starring in awful movies is not going to let them contend with the likes of the X-Men movies or the likes of Twelve Years a Slave. This means Netflix will need to produce movies and lots of them, fairly rapidly. Otherwise they will find they have lots of series but no movies and that third parties don’t want to give them films because the service is taking away from their sales figures.
Can they afford to dish out the millions upon millions of dollars that this would require?
I doubt it.
Netflix Original films currently take up a very small amount of space whereas third party movies dominate. Up the Netflix Original content to 50%, largely via series as their own trends show, and you will scare off third party companies. Companies’ whose TV shows you can replace but movies you cannot. Then people will wish for the Netflix of yesteryear and will likely flock to Amazon, who offer a good balance of original content, exclusive third party content, TV shows and movies. Like Netflix currently do but likely can’t sustain in the future with this newly announced strategy.  
Perhaps I’ll be wrong, after all I’m no business mastermind and the guys behind Netflix are obviously pretty smart, but the road ahead looks rough. What do you think?

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